investing guide

Index Fund Investing

index fund investing

Index investing is similar to mutual fund investing; however, it is based on a market index such as the S&P 500 index.

Index fund investing is considered to be more of a passively managed investing method, because the funds simply consist of securities for whatever index the fund is following.

Therefore, since index funds are not really actively managed they tend to cost less to own. Vanguard investing group has one of the oldest index funds around. Vanguard index funds have been running for over 25 years.

You may also want to check out exchange traded funds or ETFs. The main difference between index funds and ETFs is that index funds use end of day pricing; while ETFs use intra-day pricing and are traded like a typical stock. This really does not mean much though, because these funds are not typically traded in and out of that often during the day like individual stocks.